Indicator - Tether Line
Indicator - TFS: MBO Indicator
Indicator - Vol Osc Avg
Strategy - TFS Signal
Category: Indicator > Averages
Tether line indicator is the first component of TFS trading strategy. It was named this way because stock prices have a tendency to cluster around it. It means that stock prices tend to move away from the midpoint between their 50-day highs and lows, then return to that midpoint at some time in the future. On a chart, it appears as though the stock price is tethered to this line, and hence the name.
The indicator is used to trigger a buy opportunity and trailing stop. When the close crosses above the tether line, a buy signal is triggered. When the close crosses below the tether line, trader should exit the position.
Length - the parameter tells how many bars to average
VARIABLES: HIGHVAL(0), LOWVAL(0), TETHER(0);
HIGHVAL = HIGHEST(HIGH, LENGTH);
LOWVAL = LOWEST(LOW, LENGTH);
TETHER = (HIGHVAL + LOWVAL) / 2;